A   Statesman's 
Opportunity 


ADDRESS  BY 
FAIRFAX  HARRISON 

At  the  Annual  Dinner  of  the 
Railway  Business  Association 


December  10,  1914 


4 


A  Statesman's  Opportunity 

Address  by 

FAIRFAX  HARRISON 
President  of  the  Southern  Railway 

Delivered  at  the  Sixth  Annual  Dinner  of  the  Railway  Business 
Association,  the  national  association  of  manufacturers  of 
railway  materials,  equipment  and  supplies,  at  the  Waldorf- 
Astoria  Hotel,  New  York,  December  10,  1914 


IN  developing  the  principles  which 
now  control  railway  transporta- 
tion in  the  United  States,  we,  as  a 
people,   have  traveled   far   in    recent 
years. 

The  time  is  well  within  the  memory 
of  men  still  in  active  life  when  rail- 
roads, both  in  regard  to  their  owner- 
ship and  in  regard  to  their  use,  were 
considered  not  only  by  their  owners, 
but  by  the  public,  as  private  property. 
This  was  when  railroad  building,  as  a 
means  of  developing  and  making  avail- 
able vast  stretches  of  territory,  was  the 
prime  necessity  of  the  people  and  when 
the  thing  of  first  importance  was  to 
encourage  the  use  of  private  capital  in 
these  pioneer  enterprises.  As  a  means 
of  giving  this  encouragement,  private 
investors  were  invited  to  build  rail- 
roads, with  no  suggestion  that  a  sys- 
tem of  public  regulation  would  super- 

297757 


sede  the  right  of  private  use  and  man- 
agement. 

DISCRIMINATIONS  AND 
REBATES 

Under  this  conception  of  the  nature 
of  these  properties,  it  inevitably  hap- 
pened that,  as  the  railroads  were  to  be 
used  for  private  ends,  their  managers 
felt  at  liberty  to  make  bargains  solely 
from  the  standpoint  of  the  private  gain 
of  the  company.  They  sold  transpor- 
tation to  those  of  the  public  who  took 
it  by  wholesale  at  prices  and  on  terms 
different  from  those  on  which  they 
sold  to  the  individual  who  took  little 
of  it.  They  gave  rebates  to  those  of 
sufficient  commercial  importance  to  de- 
mand them,  while  denying  these  con- 
cessions to  others.  They  did  things 
which  they  deemed  would  increase 
their  business  %and  their  .-profits,  such 


as  many  engaged  in  other  forms  of  in- 
dustry still  do,  without  recognizing 
that  their  form  of  industry  differed 
from  most  other  forms  of  industry,  in 
that  there  inhered  in  it  a  peculiar  pub- 
lic, as  distinguished  from  private,  in- 
terest in  the  character  of  their  services 
and  in  the  terms  on  which  they  were 
performed. 


OLD  CONCEPTION  OUT- 
GROWN 

This  conception  of  the  business  of 
transportation,  entertained  at  once  by 
the  authority  which  granted  the  origi- 
nal charters  and  by  those  who  had  ven- 
tured their  means  in  making  them  a 
success,  was  at  the  same  time  conceded 
and  encouraged  by  the  public,  but  we 
now  deem  that  it  was  fundamentally 
unsound.  It  was  based  upon  a  prin- 
ciple of  the  relation  of  the  State  to  in- 
dustry, which,  like  some  others,  has 
gone  down  in  a  revolution  of  public 
opinion.  It  ignored  the  controlling  in- 
fluence which  transportation,  as  dis- 
tinguished from  most  other  forms  of 
industry,  was  in  time  to  exert  upon  the 
public  welfare.  It  failed  to  take  into 
account  the  fact  that  the  fate  and  the 
fortunes  of  industries,  of  individuals 
and  of  communities  could  be  made  or 
marred  by  a  few  men  controlling,  for 
the  gain  of  private  owners,  the  trans- 
portation facilities  of  the  country.  It 
failed  to  recognize  that  a  power  harm- 
less enough  when  it  was  granted  might 
become  with  exercise  so  great  as  to  be 
a  political  menace.  Whatever  was  its 
original  quality,  an  economic  concep- 
tion which  differed  fundamentally 
from  a  political  tendency  could  not  be 


suffered  permanently  to  survive  in  a 
democracy. 

TOO  MUCH  PRIVATE  POWER 

As  the  economic  necessity,  con- 
sidered from  the  standpoint  of  the 
prime  interest  of  the  people,  for  the 
building  and  extension  of  railroads  be- 
gan somewhat  to  decline,  the  public 
mind  commenced  to  busy  itself  with 
other  related  questions,  chiefly  eco- 
nomic in  their  character,  which  were 
then  pushing  to  the  front — with  the 
question  of  how  competition  or  the  op- 
portunities for  competition  created  by 
the  railroads,  was  affecting  rival  mar- 
kets, or  rival  producing  centers,  or  rival 
commodities  and  .industries,  or  aspir- 
ing and  rival  communities.  It  was  per- 
ceived that  the  conception  of  private 
ownership,  accompanied  by  the  un- 
qualified and  unregulated  right  of  pri- 
vate use  for  private  gain,  gave  to  the 
private  owners  in  the  last  analysis  the 
power  of  commercial  life  or  of  com- 
mercial death  over  individuals  and 
over  industries  and  communities,  and 
could  not  in  the  general  interest  be 
tolerated. 

PUBLIC  RIGHT  TO  REGULATE 

This  resulted  in  the  recognition  of 
a  new  conception — that  a  right  exists 
in  the  public  to  regulate  the  use  of 
these  privately  owned  and  privately 
managed  properties,  and  immediately 
efforts  began  to  be  made,  with  more 
or  less  definiteness  of  purpose  and 
with  more  or  less  moderation,  to  regu- 
late by  governmental  authority  the 
use  by  their  owners  of  privately 
owned  transportation  properties. 

The  appearance  of  this  new  con- 


ception  marked  the  beginning  of  a 
bitter  controversy  between  the  own 
ers  of  these  properties,  on  the  one 
hand,  who  had  invested  their  money 
believing  that  they  were  not  surren- 
dering the  right  of  private  and  unregu- 
lated management,  and,  on  the  other 
hand,  representatives  of  the  public, 
who  asserted  the  right  and  the  duty  of 
the  government  to  control  the  power 
of  private  management  and  to  subject 
the  use  of  these  properties  to  com- 
plete and  effective  regulation — to  go 
far  beyond  the  regulation  of  the  origi- 
nal economic  questions  and  to  inter- 
fere even  with  the  smallest  details  of 
physical  operation.  This  controversy 
was  fiercely  waged  for  many  years. 
Its  virulence  was  intense,  but  not 
without  precedent.  In  all  history  the 
conflict  of  creeds,  of  ideas  and  of  sys- 
tems has  been  bitter  and  has  been 
merciless. 


SWING  TO  OTHER  EXTREME 

In  this  conflict  the  public  has  come 
out  victorious,  and  in  its  victory  has 
been  illustrated  the  cycle  theory  of 
the  philosophy  of  history.  In  the  bit- 
terness which  the  conflict  engendered, 
the  conception  of  a  public  right  of 
regulation  has  gone  as  far  in  the  di- 
rection of  error  on  the  one  side  as  the 
conception  of  private  ownership  and 
private  management  had  previously 
gone  on  the  other.  It  has  come  about 
that  the  public  denies  not  only  the 
right  of  unregulated  use,  but  also  the 
right  of  unqualified  private  owner- 
ship. 

It  has  resulted  in  the  assertion  of  a 
power  of  public  regulation  without 
the  assumption  of  any  corresponding 


duty  or  responsibility.  In  these  days 
of  revolution  of  opinion  the  views  of 
the  extremists  have  for  a  time  pre- 
vailed, and  the  power  of  regulation 
has  been  pushed  to  an  extent  not  an- 
ticipated when  the  right  of  reasonable 
regulation  was  first  actively  asserted. 
The  pendulum  has  now  swung  to  an 
extreme  on  the  side  of  irresponsible 
public  power  as  it  had  previously 
swung  to  an  extreme  on  the  side  of 
irresponsible  private  ownership. 


A  POLITICAL  ASSET 

In  the  clash  of  this  controversy  and 
in  the  flush  of  the  victory  of  the  con- 
ception of  irresponsible  power  in  the 
public,  many  forces  have  been  de- 
veloped and  have  found  encourage- 
ment, which  are  now  difficult  to  con- 
trol, and  the  real  interest,  as  well 
as  the  real  right  of  the  public  in 
the  system  of  transportation  has  been 
given  a  false  perspective.  One  of 
the  most  significant,  as  well  as  one 
of  the  most  embarrassing  and  im- 
portant, developments  has  been  that 
this  great  business  question  has 
been  injected  into  politics  and  has 
come  to  be  regarded  as  a  valuable 
political  asset  by  men  aspiring  to  pub- 
lic office. 

It  has  been  found  easy  to  interest 
and  to  agitate  the  public  mind  on  the 
subject.  Possessing  many  technical 
sides  difficult  of  comprehension  by 
those  uninstructed  by  practical  ex- 
perience, requiring  a  large  and  com- 
prehensive view  adequate  to  take  in 
and  properly  to  balance  the  rights  and 
interests  of  all  commerce  and  of  all 
communities,  no  matter  how  different- 
ly circumstanced  or  how  widely  sep- 


arated,  the  economic,  as  distinguished 
from  the  physical,  problem  of  the  rail- 
road manager  possesses  little  which 
will  appeal  to  the  popular  imagination, 
but  much  that  can  be  used  by  the  skill- 
ful agitator  to  produce  misunderstand- 
ings of  motives,  misconceptions  of 
purposes  and  policies,  and  so  to  arouse 
local  and  neighborhood  prejudice. 


APPEAL  OF  THE  AGITATOR 
TO  PREJUDICE 

The  only  appeal  the  railroad  man- 
ager can  make  is  to  the  spirit  of 
thoughtful  consideration,  of  wisdom 
and  moderation  of  the  people.  Here 
is  his  handicap.  To  be  successful  such 
an  appeal  takes  time,  for  the  history 
of  popular  government  shows  that  it 
takes  time  for  the  public  to  reach  its 
final  conclusion  on  any  important 
question,  especially  on  one  of  an  eco- 
nomic nature. 

On  the  other  hand,  the  appeal  of 
the  agitator  is  to  the  immediate  selfish 
interest,  to  prejudice  and  impulsive 
judgment  and  to  the  spirit  of  quick 
and  active  resentment  of  the  people. 
Such  an  appeal  does  not  take  time,  and 
the  result  in  respect  of  these  proper- 
ties is  that  many  impulsive  and  incon- 
siderate conclusions  find  their  way 
into  statutory  or  commission-made 
law  which  the  sober  judgment  of  the 
people  will  not  subsequently  approve. 
Meanwhile,  however,  a  business  of 
the  highest  public  importance,  one 
which  to  be  successful  must  be  sub- 
ject to  a  wise,  stable,  consistent  and 
constructive  policy,  has  been  made  the 
victim  of  a  judgment  which  is  impul- 
sive and  ill-considered,  a  judgment 
founded  upon  an  inadequate  compre- 


hension of  the  problem  in  all  its  reach 
and  consequence. 

A  FALSE  CONCEPTION 

A  natural  corollary  to  the  view 
which  would  make  the  transportation 
question  a  football  of  politics,  which 
would  consider  it  merely  from  the 
standpoint  of  its  advantage  to  the 
political  fortunes  of  the  aspirant  for 
public  place,  is  that  common  carriers, 
in  respect  of  their  regulation,  may  be 
considered  of  public  concern  when  it 
is  advantageous  to  do  so  and  of  pri- 
vate concern  when  that  course  consti- 
tutes the  chief  political  advantage. 
This  means  that,  if  considerations  of 
important  political  advantage  are 
dominant,  these  carriers  are  consid- 
ered as  public  when  it  comes  to  the 
imposition  of  burdens  and  to  limiting 
charges  or  regulating  operations,  but 
private  when  it  comes  to  creation  of 
credit  or  improvement  of  conditions. 

In  other  words,  there  seems  to  be 
in  many  minds  the  false  conception 
that,  in  the  matter  of  imposition  of 
burdens,  railroad  companies  are  pub- 
lic concerns  and  subject  to  the  public 
regulating  power,  but,  in  the  matter  of 
relief,  are  private  property  and  not 
entitled  to  be  considered  from  the 
standpoint  of  their  public  service. 

THE  RATE  CASE 

This  has  been  strikingly  illustrated 
by  some  of  the  contentions  recently 
made  in  the  advance  rate  hearing  be- 
fore the  Interstate  Commerce  Com- 
mission. There  the  question  was 
asked  why  it  is  that  railroads  should 
be  permitted  to  increase  their  charges 


at  a  time  of  general  business  depres- 
sion and  when  all  other  industries  are 
suffering  from  decreased  revenues.  In 
the  last  analysis  the  basis  of  this  sug- 
gestion is  that  railroads,  in  respect  of 
this  matter,  stand  as  private  enter- 
prises and  represent  only  a  private  in- 
terest. It  is  an  assertion  of  the  propo- 
sition that  their  private  owners  alone 
are  concerned  with  the  question  of 
sustaining  their  operations.  It  ignores 
the  principle,  so  often  relied  on  in 
other  connections,  that  railroads  are 
engaged  in  a  governmental  function 
and  are  doing  a  thing  essential  to  the 
public  welfare.  It  loses  sight  of  the 
fact  that  the  maintenance  of  transpor- 
tation facilities  is  a  condition  prece- 
dent to  the  success  of  every  private 
enterprise  and  to  the  return  of  pros- 
perity to  all  the  people.  It  takes  no 
note  of  the  public  nature  and  of  the 
public  obligations  of  the  transportation 
business. 

INSTABILITY,  UNCERTAINTY, 
INEFFICIENCY 

If,  however,  the  question  comes  of 
a  reduction  of  transportation  charges, 
or  of  the  imposition  of  public  burdens, 
the  teachers  of  this  doctrine  insist 
loudly  on  the  public  right  and  the  pub- 
lic power  of  regulation  and  control. 
This  inconsistency  of  attitude  on  the 
part  of  those  often  influential  in  pub- 
lic affairs  produces,  in  respect  of  mat- 
ters involving  the  continued  efficiency 
of  the  carriers,  a  situation  of  instabil- 
ity and  uncertainty  which  is  of  vital 
consequence  to  the  public. 

One  of  the  outgrowths,  full  of  men- 
ace, of  this  situation  is  the  appearance 
in  our  public  affairs  of  men  who  as- 


sert successfully  an  influence  in  di- 
recting the  regulating  power  of  gov- 
ernment, but  who  are  without  any  re- 
sponsibility, official  or  otherwise,  for 
the  consequences.  The  conscientious 
railroad  manager,  responsible  alike  to 
those  who  invest  their  private  means  in 
the  establishment  of  these  properties 
and  to'  the  entire  public  for  the  success 
of  the  transportation  system,  is  con- 
fronted by  men  who  criticise  and  op- 
pose, but  on  whom  will  fall  none  of 
the  responsibilities  or  burdens  of  fail- 
ure. The  intrusion  of  these  irrespon- 
sible influences  into  the  settlement  of 
transportation  problems  comes  from 
the  necessity  of  giving  their  solution 
a  political,  rather  than  a  business,  as- 
pect and  is  the  outgrowth  of  the  polit- 
ical conditions  which  menace  the  sta- 
bility and  usefulness  of  these  great 
transportation  properties. 

REGULATION  THAT  DE- 
PRESSES RATES 

Transportation  is  a  business,  and,  if 
it  is  to  be  efficiently  and  successfully 
conducted,  must  be  managed  on  busi- 
ness principles.  In  no  other  way  can 
it  survive  or  be  supported  as  a  busi- 
ness. 

As  the  managers  of  transportation 
properties  have,  in  the  public  interest, 
been  largely  deprived  of  the  power  of 
business  management,  any  successful 
system  of  public  regulation  must  ap- 
ply to  the  regulation  of  these  proper- 
ties sound  and  just  business  principles 
and  not  merely  the  force  of  repres- 
sion. 

A  manifest  danger  of  a  system  of 
regulation  controlled  by  politics  is 
that  it  will  be  administered  on  the 


principle  of  always  reducing  the  cost 
of  service  to  the  public  as  a  means  of 
appeal  to  popular  approval,  and  thus 
doing  to  the  railroads  all  that  can  be 
done  in  the  direction  of  curtailing  their 
business  prosperity  short  of  bringing 
destruction  upon  them.  No  business 
enterprise,  dependent  for  its  usefulness 
upon  its  growth,  can  live  if  always 
kept  down  near  the  point  of  starva- 
tion. 

COMPLICATION  OF  LOCAL 
CONTROL 

There  is  another  complication  in  the 
theory  of  regulation  as  it  is  practised 
today  which  also  has  its  origin  in  a 
political  condition.  We  have  seen  the 
unifying  forces  of  steam  and  elec- 
tricity change  the  map  of  the  commer- 
cial world.  They  have  introduced 
conditions  which  cannot  be  ignored  by 
those  who  would  give  to  the  public 
adequate  service  in  transportation.  A 
transportation  system  to  be  efficient 
must  be  co-extensive  with  the  trans- 
portation needs  of  the  people  whom  it 
serves.  If  their  business  needs  ignore 
State  lines,  the  railroads  which  would 
give  them  adequate  service  must  adapt 
themselves  to  that  condition.  The 
business  of  a  people  that  seeks  all 
markets  without  regard  to  political 
subdivisions  of  territory  cannot  be 
successfully  carried  on  if  their  means 
of  transportation  are  halted  at  State 
lines,  either  by  physical  interruption 
or  by  unwise,  inconsistent  or  exag- 
gerated local  regulation. 

The  same  interest  of  the  people 
which  demands  that  these  transporta- 
tion facilities  extend  in  physical  con- 
tinuity across  State  lines  likewise  re- 


quires unity  of  management  and 
control.  This,  of  course,  is  impossible 
without  unity  of  governmental  regu- 
lation. While  the  preservation  of  the 
States  in  their  complete  constitutional 
integrity  is  a  fundamental  necessity 
of  our  system  of  government,  it  is 
equally  essential  that  their  power 
should  not  be  extended  beyond  their 
constitutional  limitations. 

STATES'  RIGHTS 

At  a  time  and  under  conditions 
when  the  existing  development  of  our 
continental  commerce  was  inconceiv- 
able, the  fathers  of  our  government 
had  a  vision  which  was  a  miracle,  and 
it  resulted  that  the  States,  in  the  Con- 
stitution, confided  to  the  federal  gov- 
ernment the  power  to  regulate  inter- 
state and  foreign  commerce.  This  of 
necessity  involves  the  power  to  regu- 
late the  instruments  of  interstate  and 
foreign  commerce.  And  yet,  in  re- 
sponse to  the  exigencies  of  political 
warfare,  it  is  easy  to  raise  a  contro- 
versy between  the  power  of  the  States 
and  the  power  of  the  federal  govern- 
ment as  to  the  line  of  demarcation  be- 
tween their  respective  powers  as  re- 
lated to  this  question. 

In  fact,  the  controversy  as  to  the 
rights  of  the  States  has  been  the  great 
historic  controversy  between  differing 
schools  of  political  thought  among  our 
people.  The  growth  of  commerce 
has  injected  the  question  of  the  regu- 
lation of  commerce  into  this  States' 
rights  controversy  as  a  factor  of  prime 
importance.  The  question  of  what 
will  promote  and  what  will  retard  the 
efficiency  and  usefulness  of  a  trans- 
portation system  often  becomes  ob- 


scured  and  is  lost  sight  of  while  the 
advocates  of  these  differing  schools  of 
constitutional  philosophy  fight  out 
their  wars.  And  yet  a  business  enter- 
prise, if  it  is  to  succeed,  cannot  be 
subject  to  these  political  uncertainties; 
nor  can  a  business  enterprise,  depend- 
ent for  its  efficiency  and  usefulness  on 
its  unity  of  regulation  and  manage- 
ment, be  wisely  left  subject  to  many 
masters  with  differing  views  of  public 
policy  and  with  widely  varying  con- 
ceptions of  its  problems. 

CONTROL  MUST  BE  FEDERAL 

Even  without  any  wide  divergence 
of  view,  the  mere  existence  of  a  power 
of  management  in  many  masters  which 
may  be  exercised  with  different  de- 
grees of  promptness,  or  which,  if  not 
actually  exercised  at  all,  is  constantly 
made  the  basis  of  proposal  and  agita- 
tion, constitutes  an  obstacle  in  the  way 
of  effective  and  successful  railroad 
management  which  cannot  be  over- 
stated. 

It  may  be  claimed  that  our  experi- 
ence has  demonstrated  that  a  multi- 
form system  of  regulation  is  as  eco- 
nomically unsound  as  the  lack  of  any 
regulation,  for  the  railroad  problem 
can  no  longer  be  considered  as  of 
merely  local  concern  any  more  than 
it  can  be  considered  of  merely  private 
concern.  One  of  the  greatest  evils  of 
the  present  system  in  this  respect  is 
that  the  capacity  for  efficient  manage- 
ment is  weakened.  An  undue  propor- 
tion of  the  time  of  the  responsible 
railroad  manager  and  his  responsible 
assistants  is  diverted  from  the  useful 
duties  of  management  to  the  calls  for 
explanations  and  arguments  before 


many  different  State  authorities,  when 
all  that  is  necessary  might  be  accom- 
plished before  one  central  regulating 
body. 

PROMPT  DECISIONS  ESSEN- 
TIAL 

An  efficient  management  is  admitted 
by  all  to  be  a  large  factor  in  securing 
for,  or  continuing  to,  the  public  a  low 
basis  of  transportation  charges  under 
existing  conditions.  It  follows  that 
there  is  an  obligation  of  efficiency  in 
regulation  as  great  as  the  obligation 
of  efficiency  in  management. 

In  suggesting  that  consideration  it 
becomes  one's  duty  to  call  attention  to 
one  of  the  most  dangerous  weaknesses 
which  has  developed  in  the  system  we 
have  experienced,  namely :  its  inability 
to  give  prompt  decision  to  the  business 
questions  which  must  be  determined. 
No  man  of  business  experience  needs 
to  have  pointed  out  how  essential  is 
promptness,  or  the  capacity  for 
promptness,  in  dealing  successfully 
with  a  business  situation.  That  busi- 
ness in  which  there  is  no  capacity  for 
promptness  is  fatally  hampered. 

If  there  is  a  legitimate  and  pressing 
need  for  more  revenue,  the  power  to 
authorize  or  to  produce  it  must  be 
capable  of  being  brought  into  action 
at  once.  If  economies  must  be  intro- 
duced, the  power  of  management  must 
be  capable  of  responding  promptly  to 
the  need.  If  a  change  of  policy  is  de- 
manded in  the  public  interest,  the 
power  to  pass  upon  the  question  must 
be  capable  of  convenient  and  prompt 
exercise.  It  may  be  justly  said  that 
the  consensus  of  opinion  of  thought- 
ful men  everywhere  is  that  the  exist- 
ing system  of  regulation  is  fatally  de- 


fective  in  respect  of  its  capacity  for 
prompt  action. 

PROTECTION  AS  WELL  AS 
CORRECTION 

To  sum  up  what  has  been  here  sug- 
gested: no  system  of  governmental 
treatment  of  this  subject  can  be  per- 
manently successful  which  fails  to 
conserve  the  things  that  are  essential 
to  railroad  growth  and  efficiency. 
Prominent,  and  in  fact  first,  among 
these  essentials  is  adequate  railroad 
credit.  To  secure  this  a  system  of 
successful  regulation  must  be  a  sys- 
tem of  protection  as  well  as  of  correc- 
tion. Even  a  conquering  army  feeds 
its  prisoners.  Our  existing  system  has 
well  served  the  purpose  of  correction, 
but  we  have  seen  it  hesitate  when 
called  upon  to  protect. 

REGULATION  THAT 
WITHHOLDS 

The  impressive  statement  of  the 
President  made  last  Tuesday  in  re- 
gard to  the  regulation  of  our  natural 
resources  may  be  justly  applied  to 
the  conditions  which  confront  the 
country  in  regard  to  the  railroads 
when  he  said: 

"The  laws  we  have  made  do  not 
intelligently  balance  encouragement 
against  restraint.  We  withhold  by 
regulation." 

We  need  a  system  of  regulation 
which  will  recognize  the  whole  duty 
of  government,  which  can  as  readily 
build  where  things  are  sound  as  cut 
away  all  fungus  and  unhealthy 
growths:  a  system  which  will  bring 
stability  of  service  and  of  credit  as 
well  as  equality  and  fairness  of  treat- 


ment. None  of  this  can  be  if  the  sys- 
tem of  regulation  is  founded  upon  the 
shifting  sands  of  politics. 

It  must  possess  a  capacity,  and  be 
controlled  by  a  purpose,  of  prompt- 
ness in  affording  required  relief  and 
in  meeting  business  conditions  as  well 
as  in  the  removal  of  recognized 
abuses.  This  is  also  inconsistent  with 
a  mere  political  conception  of  the 
duties  and  responsibilities  of  regula- 
tion. 

It  must  be  possessed  of  an  author- 
ity co-extensive  with  the  subject  to 
be  regulated.  Its  powers  must  not 
be  divided  and  scattered  among  a 
number  of  independent  regulating 
bodies,  many  of  them  responsible  to 
a  part  only  of  the  public  whose  wel- 
fare is  involved,  all  of  varying  out- 
look and  influenced  in  their  conclu- 
sions by  differing  policies  and  often 
by  clashing  and  conflicting  interests. 
This  is  inevitable,  if  regulation  by  the 
States  and  regulation  by  the  Federal 
power  are  both  to  be  preserved. 

PRESENT  SYSTEM  CANNOT 
ENDURE 

Like  the  previous  stage  of  irre- 
sponsible private  control,  the  existing 
system  of  irresponsible,  rigid  and  di- 
vided regulation  cannot  permanently 
endure.  So  long  as  the  chief  need 
was  of  a  public  prosecutor,  it  served 
its  function,  but,  when  the  demand 
was  for  statesmanship,  it  failed  by 
reason  of  a  constitutional  incapacity 
which  relates  back  to  its  origin,  to  its 
political  progenitors. 

This  is  no  criticism  of  individuals, 
but  the  indictment  of  a  social  tend- 
ency. No  more  does  it  mean  that 
we  must  abandon  the  principle  of 


10 


reasonable  and  efficient  regulation: 
that  we  must  turn  from  the  Scylla  of 
irresponsible  regulation  to  the  Charib- 
dis  of  government  ownership.  It  is 
an  argument  that  a  system  of  reason- 
able, balanced  and  non-political  regu- 
lation has  not  failed  because  it  has  not 
yet  been  generally  tried. 

SOURCE  OF  A  SOLUTION 

Whatever  may  be  the  individual 
view,  no  one  will  deny  that  these  con- 
siderations present  a  problem,  and 
that  a  problem  still  unsolved.  Its  sub- 
ject-matter is  of  transcendent  public 
interest  and  consequence.  It  is,  as 
was  recently  suggested  by  President 
Wilson,  "the  one  common  interest  of 
our  whole  industrial  life."  My  pres- 
ent purpose  is  not  to  venture  to  sug- 
gest the  solution,  but  the  source  from 
which  an  acceptable  solution  must 
come.  As  it  is  a  big  problem,  it  must 
be  solved  in  a  big  way. 

A  solution  is  not  likely  to  be  ac- 
cepted if  the  suggestion  comes  from 
the  railroad  manager,  because  he  is 
still  supposed  to  look  at  only  one  side 
of  the  question  and  to  be  controlled  by 
a  selfish  interest. 

It  can  not  come  from  the  mere 
politician,  because  of  his  narrow 
vision  and  his  temptation  to  keep  the 
question  unsolved  as  a  means  of  easy 
political  agitation  and  as  a  valuable 
asset  for  temporary  political  advan- 
tage. 

"Who  then  will  be  sufficient  for 
these  things?" 

WHAT  THE  OCCASION 
DEMANDS 

The  problem  is  a  statesman's  op- 
portunity. It  is  as  great  a  problem  as 


has  confronted  the  statesmen  of  any 
age.  He  who  solves  it  must  be  trusted 
by  all  the  people.  He  must  be  above 
the  suspicion  of  selfish-  motive.  All 
the  lessons  of  history  must  be  at  his 
command.  He  must  be  a  profound 
student  of  human  action  and  of  hu- 
man government.  He  must  have  pow- 
er to  impress  his  views  upon  his  fel- 
lowmen.  He  must  be  able,  with  just 
and  equal  hand,  to  divide  unto  Capi- 
tal and  unto  Labor  its  living.  He 
must  be  able  to  assure  the  public  of  the 
correction  of  abuses,  the  establish- 
ment of  justice  and  the  maintenance  of 
facilities  adequate  for  their  needs,  and 
he  must  be  able  to  assure  the  private 
owner  of  protection  of  his  just  in- 
terests and  of  fairness  to  his  just 
rights.  He  must  be  able  to  reconcile 
the  people  to  his  philosophy  of  regu- 
lation and  the  politician  to  the  loss 
of  a  highly  valued  political  asset. 

Is  there  a  man  among  us  who  is 
capable  of  this? 

PRESIDENT   WILSON 
SUGGESTED 

I  venture  to  suggest  that  the  pres- 
ent President  of  the  United  States  is 
equal  to  this  great  achievement.  The 
time  seems  ripe  for  him  to  undertake 
it.  His  administration  came  into  ex- 
istence pledged  to  the  correction  of 
abuses  in  business  life  and  to  a  con- 
structive work  which  would  build 
healthily  and  mightily  to  a  greater  and 
sounder  prosperity.  Doubtless  the 
specific  things  embraced  in  his  pro- 
gram of  correction  have  been  largely 
accomplished.  Some  parts  of  his  con- 
structive program — notably  the  crea- 
tion of  a  new  banking  system — have 


11 


also  been  carried  out.  But,  of  course, 
his  comprehensive  appreciation  of 
commercial  conditions  brings  to  him 
the  realization  that  much  which  is 
constructive  remains  to  be  done. 

Having  arrived  at  the  constructive 
period  of  his  administration,  he  can 
perform  no  higher  or  more  useful  pub- 
lic service  than  by  proposing  and  car- 
rying through  a  solution  of  the  trans- 
portation problem. 


PRESIDENT'S  SOLICITUDE 
MANIFESTED 

He  has  recently,  in  an  impressive 
way,  shown  publicly  a  sympathetic 
appreciation  of  the  railroad  situation. 
In  his  response  to  the  appeal  of  the 
railroads  last  September,  he  called  the 
attention  of  the  country  to  "the  im- 
perative need  that  railway  credits  be 
sustained  and  the  railroads  helped  in 
every  possible  way,"  and  disclaiming 
any  "deep  anxiety"  that  this  would 
not  be  done,  he  gave  as  his  reason 
"that  the  interest  of  the  producer,  the 
shipper,  the  merchant,  the  investor, 
the  financier  and  the  whole  public  in 
the  proper  maintenance  and  complete 
efficiency  of  the  railways  is  too  mani- 
fest." "They  are,"  as  he  expressed  it, 
"indispensable  to  our  whole  economic 
life,  and  railway  securities  are  at  the 
very  heart  of  most  investments,  large 
and  small,  public  and  private,  by  in- 
dividuals and  by  institutions." 

WILL  THE  PRESIDENT  UNDER- 
TAKE IT? 

The  fact,  thus  made  evident,  that  he 
has  grasped  the  point  of  view  from 
which  a  solution  of  this  problem  must 


be  approached,  has  aroused  in  the 
minds  of  many  the  hope  that  before 
laying  down  the  reins  of  government 
he  will  propose  and  work  out  some 
constructive  plan  that  will  give  sta- 
bility to  railroad  investment  and 
growth.  May  we  not  ask  that  he  will 
undertake  the  work? 

The  people  of  the  United  States  have 
called  him  to  the  leadership  of  this 
nation.  They  have  entrusted  him  with 
their  power.  He  has  responded  by 
notable  public  service.  Is  it  too  much 
to  ask  that  he  undertake  this  problem 
also  and  bring  to  its  solution  the  wis- 
dom and  the  power  which  he  has  al- 
ready used  so  effectively  in  the  public 
interest  ? 

No  ambition  could  be  more  worthy 
than  to  establish  a  "Constitution  of 
Peace"  among  the  variant  views  and 
interests  which  menace  the  success  of 
the  system  of  transportation  so  essen- 
tial to  the  public  welfare.  No  service 
to  his  fellowmen  could  be  a  loftier  or 
a  finer  service  than  to  place  this  high 
interest  of  the  people  upon  a  sound, 
a  stable  and  a  permanent  foundation. 

RAILWAY  MANAGERS  WILL 
CO-OPERATE 

I  think  I  properly  interpret  the  men 
now  charged  with  the  responsibility 
of  railroad  management  when  I  say 
that  they  will  welcome  a  solution  of 
the  problem,  however  it  may  differ 
from  any  preconceived  views,  and 
will  meet  any  suggestion  that  may  be 
made  in  a  co-operative  and  a  helpful, 
and  not  in  a  carping  or  obstructive, 
spirit.  They  are  as  anxious  as  the 
most  public-spirited  statesman  for  a 
just  and  final  settlement  of  transpor- 


12 


tation  controversies.  When  it  comes 
to  the  consideration  of  any  proposal, 
they  may  be  relied  on  to  put  aside 
prejudice  and  pride  of  opinion,  for 
they,  of  all  others,  are  best  aware  of 
the  imperative  need  of  the  railroads 
for  an  adjustment  of  all  differences 
and  for  public  approval,  sympathy 


and  support.     Opposition  must  come 
from  outside  the  railroad  ranks. 

The  problem  is,  then,  how  shall  the 
transportation  system  of  the  United 
States  be  put  upon  an  assured  founda- 
tion of  efficiency,  usefulness  and  suc- 
cess? Here  is  A  Statesman's  Oppor- 
tunity. 


REQUESTS      FOR      COPIES 

of  this  pamphlet  will  be  welcome  from  all 
those  desiring  to  place  it  in  the  hands  of 
their  representatives  or  friends.  Copies  fur- 
nished or  sent  direct  to  lists  upon  application 
to  Frank  W.Noxon,  Sec'y,  Railway  Business 
Association,  30  Church  Street,  New  York. 


Form  B163 


Gaylord  Bros. 

Makers 

Syracuse,  N.  Y 
PAT.  JAN.  21.  1908 


\ 


14  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

This  book  is  due  on  the  last  date  stamped  below,  or 

on  the  date  to  which  renewed. 
Renewed  books  are  subject  to  immediate  recall. 


